Now let's have a real inquiry

Anyone expecting the Treasury select committee to offer dramatic insights into the near-collapse of the banking system and the economic slump it precipitated will be sadly disappointed.

This Labour-dominated body of MPs hit few targets.

And the biggest villains of the financial meltdown - Sir Fred Goodwin and Andy Hornby, the chief executives of RBS and HBOS respectively - escape with the mildest of rebukes.

The contrast with criticism levelled at the directors and regulators of Northern Rock in an earlier report, could not be more stark.

Most remarkable, perhaps, is that the 'soft touch' regulatory regime and credit bubble presided over by Gordon Brown while at the Treasury, barely receives a mention.

Although the Lloyds TSB board is severely reprimanded for allowing the disastrous rescue merger with HBOS, the Prime Minister's role in this catastrophic deal - and that of his crony, Lloyds chairman Sir Victor Blank - is glossed over.

The committee lamely concludes that the 'injurious responsibility' for the disastrous merger which has cost Lloyds shareholders so dearly lay with the board. It avoids naming Sir Victor and his chief executive Eric Daniels (prime movers behind the deal) nor calls for their departure.

This is despite the fact that Mr Brown arranged for the competi- tion law to be suspended to let the deal happen, despite reservations from the Office of Fair Trading.

Though the committee makes no direct criticism of Mr Brown's decision to waive the rules, it also regrets the passing of competition in the sector.

However, the industry as a whole comes in for an onslaught, accused of making banking so complex that high risks sitting on balance sheets were obscured. This made it hard to understand what was going on.

In this reckless environment of corporate governance, the means by which boards of directors were meant to keep a check on top executives proved ineffective.

Although the committee protects Downing Street, it has strong reservations over how taxpayers' money was spent propping up the banks and about the transparency of the operations.

It believes that UK Financial Investments should be much more closely monitored. And the public must be told a great deal more about the insurance scheme under which taxpayers have taken hundreds of billions-worth of toxic assets on to the nation's books.

MPs also suggest it is unfair that building societies, which were not involved in such reckless deals, have been asked to pay into a compensation scheme that will bail out depositors in failed banks.

However, they seem to have ignored the fact that one of the biggest recent casualties, the Dunfermline Building Society, required £1.6bn from the Exchequer to persuade the Nationwide to take it over.

Up until now, it had been argued there was no need for a full inquiry into the most serious banking crisis for several generations because the Treasury select committee had been doing such a good job.

Yet despite a welter of evidence and volumes of written submissions, its findings are unsatisfactory.

What, for example, did Mr Brown and Sir Victor really discuss at the cocktail party when the Lloyds- HBOS merger was dreamed up?

What do the minutes and internal documents say aboutSir Fred's disastrous decision to push ahead with the fatal takeover of the Dutch bank ABN-Amro? What was the sequence of events which led to the semi-nationalisation of the banks in the weeks after the Lehman Brothers collapse?

The truth is, that every other banking crisis of modern times has been followed by detailed semijudicial-style probe - not a report from a Commons committee, which comes nowhere near this and spreads blame so thinly.

The public deserves better answers than it has received. Until there is a genuine independent investigation, far removed from political agendas, the real culprits will continue to escape retribution.